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- oOh!media (OML) has tabled a 33 per cent decline in revenue over the first six months of 2020 to $205 million
- All of the outdoor media and advertising company’s revenue streams were impacted by changes such as reduced work commutes and travel due to the COVID-19 pandemic
- This contributed to a net loss after tax of $27.5 million, compared to a $9 million profit in the previous period
- Nevertheless, cost-cutting measures along with an equity raise enabled the company to reduce its net debts from $239.3 million to $115.2 million
- oOh!media maintains market conditions are too uncertain to release any guidance for the remainder of 2020
- Shares have been trading 10.5 per cent higher at 97.8 cents
oOh!media (OML) has tabled a 33 per cent decline in revenue over the first six months of 2020 to $205 million.
The impacts of the COVID-19 pandemic, such as working from home practices and a reduction in commuting and travel, hit all of the company’s revenue streams.
The group’s revenue from its Commute products in the Sydney and Melbourne’s rail network declined 35 per cent on the prior corresponding period (pcp). Similarly, Retail revenue declined 34 per cent, Fly dropped 45 per cent and Locate decreased 51 per cent.
The least severely impacted was Road revenue which contracted 18 per cent over the first half of the 2020 Financial Year, which the company reports for the period from January 1, 2020, to June 30, 2020.
This contributed to contracted underlying earnings before tax, interest, tax, depreciation and amortisation (EBITDA) of $10.8 million in the first half of FY20 compared to $56 million in the pcp.
Nevertheless, the outdoor media and advertising company was able to mitigate the damage through fixed rent expense savings, cost-cutting measures and capital expenditure reductions.
Including a $7 million job keeper benefit, oOh!media reduced operating expenditure by $12.3 million from the previous period.
The company reported an underlying net profit after tax and amortisation (NPATA) loss of $16.9 million compared to $18.2 million profit in the pcp.
After accounting for amortisation charges, oOh!media tabled a $27.5 million net loss after tax, compared to a $9 million profit in the previous period.
Cost-saving measures along with a $167 million equity raise also enabled the company to reduce its net debts from $239.3 million to $115.2 million.
This also improved its gearing ratio, of net debt by EBITDA, to 1.2 times from 2.6 times as of the end of December 31, 2019.
As of June 30, 2020, oOh!media had $125.1 million cash on hand and over $230 million in available undrawn facilities.
The company will not pay a dividend for the period and maintains that market conditions are too uncertain to release any guidance for the remainder of the 2020 financial year.
Revenue recovering
CEO Brendon Cook did, however, note that since the end of H1FY20 business has regained some ground.
“As we have seen in New Zealand, audience growth has recovered strongly which has led to a 36 per cent increase in our revenue in July from June, although the latest lockdown may affect the current quarter,” Brendon explained.
“Using advanced mobile data we can also see that Out of Home audiences are returning across Australia when looked at nationally, although of course some areas are still heavily impacted,” he continued. “Total out of home audience volumes as at August 17, 2020, were tracking at 75 per of their 2019 level up from a low of circa 50 per cent in mid-April.”
“Combined roadside and retail audience volumes in regional areas have recovered to 93 per cent of their level compared to the same week last year, having dipped as low as 57 per cent in mid-April,” he added.
Shares have been trading 10.5 per cent higher at 97.8 cents at 1:30 pm AEST.
